In the recent matter of Martyn & Martyn  FamCA 526, a binding child support agreement entered into by the parties in 2012 was set aside after it was found that the COVID-19 pandemic was an “exceptional circumstance” and the father would suffer hardship if the agreement was not set aside pursuant to section 136(2)(d) Child Support (Assessment) Act (Cth).
In his application, the father had to establish that:
“because of exceptional circumstances, relating to a party to the agreement or a child in respect of whom the agreement is made, that have arisen since the agreement was made, the applicant or the child will suffer hardship if the agreement is not set aside.”
The father submitted that the closure of international commerce resulted in the loss of 90% of his business and that, unless interstate and international borders reopened shortly, he would have to liquidate the company and declare bankruptcy. The Court found that:
- the reduction of the father’s income would not enable him to pay child support in the sum required by the agreement;
- it was satisfied that the outbreak of the COVID-19 pandemic was an exceptional circumstance; and
- that the father would suffer hardship if the agreement was not set aside.
It is important to note that consideration was also given to whether the agreement should have been suspended for a period of time rather than set aside. However, given the likely duration and impact of the COVID-19 pandemic on international commerce is unknown, it was not possible to determine whether the father’s business would recover to the extent that he would be capable of satisfying the obligation imposed upon him under the terms of the agreement.
A better alternative is to avoid the problem by including a suitable unemployment clause in the original departure order or child support agreement. Talk with Lotus Legal to discuss your particular options.